Pemex Plans 200 Oil Wells in Southern District

MEXICO CITY (Dow Jones Newswires), Aug. 19, 2009

Petroleos Mexicanos is seeking contractors to drill 200 oil wells in the southern district as the state oil company struggles to stabilize plummeting oil production.

Drilling is scheduled to start in early October and last for three years, according to documents on Compranet, the government procurement Web site.

Pemex has ramped up investments despite the oil price crash of late 2008 and early 2009, providing opportunities for oil services companies such as Halliburton Co. and Schlumberger Ltd. at a time when activity has slowed in major markets such as the U.S. and Canada.

On July 30 Pemex said it will stick to its $20 billion capital expenditures target for this year despite the price slump. Pemex's total investments reached $18 billion last year, up from just $5.1 billion in 1998.

The boost in spending hasn't stabilized production, which is down by more than a fifth since peaking in 2004. The main problem is Cantarell, the largest Mexican oil field ever discovered, where output is down 37% on year and 5% on month to 658,700 barrels a day in June.

International oil services companies Halliburton, Schlumberger, Weatherford International Ltd., Baker Hughes Inc. , Nabors Industries Ltd. have registered for the tender. Seven Mexican oil services firms, including billionaire Carlos Slim's Servicios Integrales GSM, a unit of industrial conglomerate Grupo Carso SAB.  

Copyright (c) 2009 Dow Jones & Company, Inc.

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